NetSol closes McCue Systems acquisition
05 July 2006 | 1773 views | 0
Source: NetSol Technologies
NetSol Technologies, Inc. (Nasdaq:NTWK), a developer of proprietary software applications and provider of information technology (IT) services, today announced it has completed its acquisition of Burlingame, California-based McCue Systems Inc., a leading provider of lease and loan portfolio management software for banks, leasing companies and manufacturers.
"We are pleased to announce that we completed our acquisition of McCue Systems on June 30, our fiscal 2006 year end," said NetSol CEO Naeem Ghauri. "The ability to identify, engage and acquire a market leader such as McCue is a testament to the expertise of our team and their dedication and ability to scale the business. We believe this is a major step toward establishing a U.S. presence, as well as market penetration into a region that represents a highly profitable sector of the global asset leasing industry."
"This acquisition further solidifies NetSol Technologies' standing as a world class provider of software solutions for the equipment and vehicle leasing industry," said McCue Systems President, CEO and founder John McCue. "Our client base of global brands, from Cisco to Hyundai to Volkswagen, will be well served by the technology leadership, business acumen, and professional services expertise now available through the combined organization. We are pleased to be counted among the NetSol family."
Under the terms of the acquisition agreement, NetSol acquired McCue Systems for approximately $8.5 million. Payment consisted of 50 percent cash with the balance paid through the issuance of NetSol's common stock carrying Rule 144 restrictions. Additionally, there is a 50 percent deferred component based on an earn-out formula over McCue's 2006 and 2007 fiscal years, ending December 31, 2006 and December 31, 2007, respectively. The company anticipates paying the balance of the consideration in two traunches scheduled over the next 24 months.
"We are extremely pleased to have completed the McCue acquisition before the close of our fiscal year end," said NetSol Chairman Najeeb U. Ghauri. The acquisition of an established U.S.-based software company is a significant step forward for NetSol, as we now have a strong marketing and solution delivery platform in the largest leasing and finance market in North America. We are also delighted to announce that John McCue will continue in his role as CEO and President of McCue Systems. We look forward to working closely with John as we focus on growing the business in the U.S. and abroad."
NetSol has reported seven consecutive quarters of revenue growth and profitability, with net revenue of $14 million for the first nine months of fiscal 2006, a 76 percent increase over the comparable period last year. McCue Systems reported revenue of approximately $5.6 million with net profit of approximately $655,000 for fiscal 2005, ended December 31.